23327: Blanchet: Fw: recent article on Fonkoze in UN newsletter (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: Max Blanchet <MaxBlanchet@worldnet.att.net>

From: "Sharmi Sobhan" <fonkozeusa@fonkoze.org>


Dear FKZ USA Board and family,

The UNCDF recently published an article on Fonkoze in its Microfinance
magazine.

http://www.uncdf.org/english/microfinance/newsletter/pages/sept_2004/news_fonkoze.php

UNITED NATIONS CAPITAL DEVELOPMENT FUND
Microfinance Matters
Issue 5 / September - October 2004

"Shoulder to Shoulder" in Haiti

Facilitating Remittances and the Case Study of Fonkoze


Remittances help fight rural poverty in some of the poorest regions of the
world. Migrant workers send home more than USD 100 billion each year; this
is money their families use to pay for food, housing and education. This is
twice the level of official development assistance paid by rich nations. In
some countries, remittances surpass foreign direct investment and
development assistance combined.

In developing countries more than 90 per cent of remittances are used to
cover household expenses. The amounts are often small, maybe USD 100 or USD
200 at a time, but they put money directly in the hands of rural poor
people.

Unfortunately, up to 20 per cent of the value of remittances can be lost in
transfer costs. The creation and strengthening of financial institutions in
rural areas will help reduce the cost of sending and receiving remittances -
therefore providing more working capital to those who need it the most.

The Lifeline of the Poor

Many in Haiti would argue that the Haitian economy is held together by two
forces - the women street vendors who are often referred to as the "backbone
of the Haitian economy," and the Haitians living abroad who send money home.
Remittances come from the many working Haitians of the Diaspora, primarily
in the United States and the Dominican Republic. While it is difficult to
estimate the exact amount of remittances to Haiti due to poor statistical
information and informal channels of exchange, estimates currently available
suggest that in 1999 alone the total was USD 720 million. This represents
17% of Haiti's Gross Domestic Product.

IFAD selects Fonkoze, Haitian Non-profit bank for award

The International Fund for Agricultural Development (IFAD) and the
Consultative Group to Assist the Poor (CGAP) in December 2003, awarded
Fonkoze, an alternative bank in Haiti that provides financial services to
the rural poor, with the 2003 Rural Pro-Poor Innovation Award of USD $50,000
for its pioneering money transfer service in Haiti. The Award provides
funding to microfinance institutions that have developed innovative
methodologies to reach and have an impact on very poor clients in rural
areas. Fonkoze will use the money to launch a large-scale public education
campaign and to strengthen awareness of the remittance services of Home Town
Associations of Haitian Migrants in the US and increase its client base.

Fonkoze ('shoulder-to-shoulder' in Creole), a non-profit foundation, is
formed of an economic alliance of peasant organizations, women's
collectives, cooperatives, credit unions, "ti machann" (women street vendor)
groups, and religious communities, from all sections of the country. It is
dedicated to the rebuilding of Haiti's economy by empowering people and
community organizations to engage in successful, income-producing economic
activities. The Foundation provides a full range of financial and
educational services necessary to help the poor women and men of Haiti
participate successfully in the economy.

With 18 branch offices nationwide, the Foundation reaches 25,000 clients and
has a loan portfolio of USD 2.6 million. In 2003, FONKOSE processed a total
of USD 5.5 million in remittance.

Fonkoze is now positioned to spin off its financial services to form Haiti's
first micro-credit oriented commercial bank. The largest proportion of stock
in this new institution would be held by the Foundation, but other
stockholders from within Haiti and from abroad would be encouraged to
invest. It has recently developed a partnership with the American commercial
bank, City National Bank of New Jersey (CNB). This partnership has resulted
in multiple benefits for both Fonkoze and CNB.

IFAD has a long standing role in enhancing rural development in the Latin
America and the Caribbean region through participatory projects. Through
initiatives such as funding microfinance institutions and banks for the
poor, IFAD has been working for over 25 years in empowering poor people in
rural areas to overcome poverty. IFAD is therefore in a unique position to
help the senders and recipients of remittances to increase their access to
financial services and invest in employment and income generating projects.




Sharmi Sobhan
Executive Director
Fonkoze USA
305 Seventh Avenue, 15th Floor
New York, NY 10001-6008
Ph:  212.822.9553
Fax: 212.989.0983
fonkozeusa@fonkoze.org
www.fonkoze.org